Insurance, Fintech & EM-focused Analyst, KT Capital Group, KT Capital Group

Alec Tseung

Insurance, Fintech & EM-focused Analyst, KT Capital Group

Equity Bottom-Up

Lifenet Insurance Company / Equity Bottom-Up

<p>We have discussed the more detailed investment thesis and financial analysis in our previous note (<a href="https://www.smartkarma.com/insights/lifenet-a-rejuvenated-insurtech-story-in-japan" target="_blank" data-smartkarma-citation="insights:53842" rel="noopener">Lifenet: A Rejuvenated InsurTech Story in Japan)</a>. In this brief note, we will focus more on its recent partnership and “platformization” strategy and why this could be a future catalyst.</p>

We have discussed the more detailed investment thesis and financial analysis in our previous note (Lifenet: A Rejuvenated InsurTech Story in Japan). In this brief note, we will focus more on its recent partnership and “platformization” strategy and why this could be a future catalyst.

Lifenet: "Platformization" To Potentially Drive the Next Phase of Growth

Japan Specialist

Mark Chadwick

<div>
<ul>
<li><span xml:lang="EN-US" data-contrast="auto">Money Forward’s stock price declined by 12% on the day following a weak Q3 earnings release. </span></li>
<li>
<span data-ccp-props='{"201341983":0,"335551550":1,"335551620":1,"335559739":160,"335559740":259}'> </span><span xml:lang="EN-US" data-contrast="auto">The weaker revenue print was partially due to the lumpiness of revenue recognition in MF X (technology solutions), and lower ARPA growth in the core MF Business domain. </span><span data-ccp-props='{"201341983":0,"335551550":1,"335551620":1,"335559739":160,"335559740":259}'> </span>
</li>
<li>
<span xml:lang="EN-US" data-contrast="auto">We take a deeper look at the underlying SaaS metrics for MF Business and note some slowing in key KPIs. </span><span data-ccp-props='{"201341983":0,"335551550":1,"335551620":1,"335559739":160,"335559740":259}'> </span>
</li>
<li>
<span xml:lang="EN-US" data-contrast="auto">Nevertheless, we believe that the company is well placed to target mid-sized companies, which will ultimately drive higher ARR growth.  </span><span data-ccp-props='{"201341983":0,"335551550":1,"335551620":1,"335559739":160,"335559740":259}'> </span>
</li>
<li><span data-ccp-props='{"201341983":0,"335551550":1,"335551620":1,"335559739":160,"335559740":259}'>Even assuming a weaker NTM growth of 25%, we see 30% upside for the share price</span></li>
</ul>
</div>



Money Forward’s stock price declined by 12% on the day following a weak Q3 earnings release. 

 The weaker revenue print was partially due to the lumpiness of revenue recognition in MF X (technology solutions), and lower ARPA growth in the core MF Business domain.  


We take a deeper look at the underlying SaaS metrics for MF Business and note some slowing in key KPIs.  


Nevertheless, we believe that the company is well placed to target mid-sized companies, which will ultimately drive higher ARR growth.   

Even assuming a weaker NTM growth of 25%, we see 30% upside for the share price



Money Forward (3994) - 30% Upside Despite Slower Growth

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Japan Post Holdings / Equity Capital Markets

<div><p>The Japanese government plans to sell over 26% or US$8bn worth of <a href="https://www.smartkarma.com/entities/japan-post-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:359:1" rel="noopener">Japan Post Holdings (6178 JP).</a> We've covered most most aspects of the deal in our previous note, <a href="https://www.smartkarma.com/insights/japan-post-holdings-placement-the-final-us-8bn-countdown-past-deal-didn-t-do-well" target="_blank" rel="noopener">Japan Post Holdings Placement - The Final US$8bn Countdown - Past Deal Didn’t Do Well</a>. </p></div><div><p>In this note, we will talk about the updates and the share price performance so far.</p></div>

The Japanese government plans to sell over 26% or US$8bn worth of Japan Post Holdings (6178 JP). We've covered most most aspects of the deal in our previous note, Japan Post Holdings Placement - The Final US$8bn Countdown - Past Deal Didn’t Do Well. In this note, we will talk about the updates and the share price performance so far.

Japan Post Holdings Placement - The Final US$8bn Countdown - Shaping up Better than the Last Deal

<ul>
<li><span xml:lang="EN-US" data-contrast="none">San San should benefit from an end to Covid restrictions as employees start to network again, with revenue driven to some extent by the volume of business cards that are digitised</span></li>
<li><span xml:lang="EN-US" data-contrast="none">San San remains in the early stages of its growth cycle as corporate Japan embraces digital transformation</span></li>
<li><span xml:lang="EN-US" data-contrast="none">Q1 Sales growth +25% YoY, accelerated from 19% YoY the previous quarter</span></li>
<li>Bill One, a new invoicing platform, is starting to contribute</li>
<li>The stock has run up 52% YTD, one of the top performers among large cap SaaS companies in Japan </li>
<li>Trading at 18x TTM Revenue the stock is cheaper than peers</li>
</ul>


San San should benefit from an end to Covid restrictions as employees start to network again, with revenue driven to some extent by the volume of business cards that are digitised
San San remains in the early stages of its growth cycle as corporate Japan embraces digital transformation
Q1 Sales growth +25% YoY, accelerated from 19% YoY the previous quarter
Bill One, a new invoicing platform, is starting to contribute
The stock has run up 52% YTD, one of the top performers among large cap SaaS companies in Japan 
Trading at 18x TTM Revenue the stock is cheaper than peers


San San (4443) - Networking, Not Net Working

Simplex Holdings / Equity Capital Markets

<div>
<p>Simplex Holdings’ shareholders raised around US$300m via selling some of their stake in the company. Simplex has consistently been ranked among the top companies in IDC Fintech rankings over the past nine years.</p>
</div>
<div>
<p>We have looked at the company’s past performance in our earlier notes:</p>
</div>
<div>
<ul>
<li>
<a href="https://www.smartkarma.com/insights/simplex-holdings-pre-ipo-steady-topline-growth-but-appears-to-be-at-peak-margins" target="_blank" rel="noopener">Simplex Holdings Pre-IPO - Steady topline growth but appears to be at peak margins</a> and  </li>
<li><a href="https://www.smartkarma.com/insights/simplex-holdings-pre-ipo-peer-comp-valuation-lagging-in-size-but-leading-in-growth-and-margins" target="_blank" rel="noopener">Simplex Holdings Pre-IPO - Peer Comp, Valuation - Lagging in Size but Leading in Growth and Margins and</a></li>
<li><a href="https://www.smartkarma.com/insights/simplex-holdings-ipo-valuation-looks-ok-past-performance-will-weigh-on-sentiment" target="_blank" rel="noopener">Simplex Holdings IPO - Valuation Looks Ok, past Performance Will Weigh on Sentiment</a></li>
</ul>
</div>
<div>
<p>In this note, we'll look at the deal dynamics and provide a table with implied valuation at different share price levels.</p>
</div>


Simplex Holdings’ shareholders raised around US$300m via selling some of their stake in the company. Simplex has consistently been ranked among the top companies in IDC Fintech rankings over the past nine years.


We have looked at the company’s past performance in our earlier notes:




Simplex Holdings Pre-IPO - Steady topline growth but appears to be at peak margins and  
Simplex Holdings Pre-IPO - Peer Comp, Valuation - Lagging in Size but Leading in Growth and Margins and
Simplex Holdings IPO - Valuation Looks Ok, past Performance Will Weigh on Sentiment



In this note, we'll look at the deal dynamics and provide a table with implied valuation at different share price levels.


Simplex Holdings IPO Trading - Listing Round 2

Japan

Money Forward, Inc. develops mobile application software. The Company produces automatic household account book softwares, household account book application softwares, and other products. Money Forward also provides personal financial management, cloud based accounting solutions, and other services.

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Money Forward (3994 JP)

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Money Forward (3994) - 30% Upside Despite Slower Growth

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Mark Chadwick

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Sumeet Singh

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